News

New accessory-dwelling units law brings hope, confusion

City's 2017 ordinance sparks big questions about little dwellings

A granny unit seen on the right has two bedrooms and bathrooms built at the former spot of a family's pool. About 23 percent of single-family homes are occupied by renters are prevented from adding accessory-dwelling units under city law. Photo by Veronica Weber.

When Palo Alto officials changed the zoning rules for accessory-dwelling units last year, their goal was to encourage the construction of these little dwellings on residential lots throughout the city.

But for Chris Gadda, the new law might inadvertently lead to a unit's destruction.

About six years ago, Gadda bought a home that included an illegal accessory-dwelling unit (ADU), he told the Planning and Transportation Commission on Wednesday night. More recently, he tried to make structural upgrades to fix up the main home's brick foundation, which dates back to 1901. But in trying to get a permit, he was told that he'd have to bring the accessory-dwelling unit into compliance before he could get to work on the main house.

Gadda said he hoped to have his mother-in-law live in the new structure, but because the law ties improvements to the main house to the accessory-dwelling units, he might have to "smash up" the ADU to make the needed foundation fixes.

"I'm hoping we can look at ways for more flexibility for illegal ADUs to be legalized," Gadda told the commission during a wide-ranging and at times emotional discussion of the new law.

The city has seen some modest successes with the new law since its passage in April. Traditionally, the city has seen only about four accessory-dwelling units constructed per year, according to staff. Last year, planners had issued permits for nine new ADUs. Another 14 applications are currently under review, according to a report from the Department of Planning and Community Environment.

But as the commission learned on Wednesday, the new law is also riddled with kinks and ambiguities, which at times lead to confusion and unintended consequences.

Judith Wasserman, a longtime architect and former chair of the Architectural Review Board, said she was designing an ADU for a client when she was informed by planning staff that the 400-square-foot unit would have to be compliant with the city's "green building" codes. This despite the fact that the green-building sheet states that the program applies only to projects with 1,000 square feet or more, she told the commission.

And Tom Lundy, who launched plans in 2016 to build an ADU cottage on his Loma Verde Avenue property, was surprised by the new law, which prohibits the main house and the ADU to both be rented out to separate tenants. Lundy noted in a letter that the deed restrictions required by the new ADU ordinance have made the project "financially infeasible for us." In a letter, he asked the city for a waiver that would allow him to proceed under the old rules, which did not have a deed-restriction requirement for owner occupancy.

The planning commission discussed these issues, and other complications surrounding the new ordinance, over a wide-ranging and at times contentious meeting Wednesday. While they didn't take any votes, most commissioners agreed that the ordinance could benefit from some further revisions.

There was little consensus, however, on exactly what should be changed. Commission Chair Ed Lauing and Commissioner Doria Summa both noted that the ordinance is still new and that the city doesn't have enough data to justify significant revisions.

Commissioner Michael Alcheck, on the other hand, argued that the new law is severely flawed and riddled with inconsistencies. He pointed, for example, to a provision that grants homeowners who construct new accessory-dwelling units a density bonus of 175 square feet -- a concession intended to both make the project more lucrative and more code-compliant. Providing bonus lot coverage and floor area is to "give some development flexibility for existing developed sites that may be at or near the related maximums allowed."

As written, the provision applies only to owners of existing homes. Those building a new home with an ADU, would not be eligible for the bonus -- unless, that is, they build the main house, wait six months, and only then apply for the ADU.

Alcheck argued that provisions like this needlessly create two classes of people: those eligible for the bonus and those who would not receive it. The city, he argued, should make the density bonus available for all ADU construction, whether or not the unit is built near an existing home or alongside a brand new one.

"Is there a single good rationale that can be identified that can support the positions that bonuses ... can be granted for ADUs built after the single-family home but not concurrently?" Alcheck asked.

Commissioner Przemek Gardias agreed with Alcheck's logic, though he came to a different conclusion. Rather than give floor-area bonuses to all ADU projects, the city should scrap it altogether, Gardias said.

"We can find another way to allow for (a) larger number of units for ADUs to get built," Gardias said.

Alcheck also opposed the provision in the new ordinance requiring the owner to occupy either the main house or the ADU -- a requirement that is memorialized in a deed restriction ADU builders have to sign. According to Campbell's report, the provision aims to help "address neighborhood concerns about absent land owners and increased rental activity in residential neighborhoods."

At the same time, about 23 percent of the city's single-family homes are renter-occupied and would thus not be eligible for an ADU. By only allowing ADUs at owner-occupied properties, Alcheck argued that the city is basing the law on an "irrational fear" of renters.

Not everyone shared this view. Summa said that she has no problem with renters but argued that there is value in knowing your neighbors and not having heavy tenant turnover in residential neighborhoods.

There was more agreement the topic of development fees for new ADUs, which can add up to nearly $10,000. Commissioners agreed that these fees should be reduced or waived altogether for cases where the homeowner commits to renting out the ADU at a below market rate.

Staff plans to return to the commission in the spring with a list of potential changes to the ADU ordinance, which would then be forwarded to the City Council for adoption.

Posted by Online Name
a resident of Embarcadero Oaks/Leland
on Jan 15, 2018 at 11:26 amOnline Name is a registered user.

Aren't you glad the deep-thinking City Council rushed this whole ADU law through without thinking through the issues? Remember the City Council meeting where certain "adults" shut off substantive questions,aying, "Just get this done! Enough discussion."

Too bad they couldn't be bothered to respond to the various tough issues and now there are reports they're considering allowing ADUs on the FRONT lawns.

Not being able to rent out the main house and the ADU to two separate entities is absurdly inconsistent, esp. since this was pitched as housing for granny and homeowners' adult kids!

Posted by Online Name
a resident of Embarcadero Oaks/Leland
on Jan 15, 2018 at 11:49 amOnline Name is a registered user.

When the question of parking was raised at the CC meeting, Councilman Corey Wollback was totally surprised. But rather than saying that the parking issue needs more thought, Corey responded, "Let them park on the front lawns."

And yes, they were pitched as granny units. There were heart-rending tales about how the ADUs could house someone's disabled son and allow people's adult kids to stay in the community.

Of course then the rules came down saying that there would be no occupancy limits, no rent control, no discussion of limiting rent increases and that ADUs MUST be rented out for real money to family members -- too bad, granny.

Between the 1st and 2d CC meeting, several of us emailed questions to the CC members while the rules were being formulated. Three cc members responded and tried valiantly to answer our questions but they couldn't answer most of them! "Good question." "We need to look at that more."

But it was real clear that all tenants -- Granny, the disabled son, the adult kids -- had to be charged the SAME rents with no special accommodations for whether poor Granny even had an income!

There's also the little-known provision that the city could/would collect its share of the rents based on what the neighbors were charging. If your neighbor charged $4,000 a month, the city would ASSUME you also were getting $48,000 in rental income from Granny.

Thanks for the article clarifying a few of the remaining uncertainties.

What happened to the argument that the ADU is for a family member or to help the owner with needed extra income? The city wants to allow the owner to move away? That turns the house and ADU unit into a business for profit at the neighborhood's expense! It's already bad enough that the city allows as many tenants as you can squeeze into your house. The usual requirements for occupancy go right out the window and never mind issues of health and safety that normally boarding houses and inns are required to meet. R-1 homes were not built to serve as boarding houses with multiple bunk beds. Good grief.

Posted by Mama
a resident of Crescent Park
on Jan 16, 2018 at 11:33 am

Please, please do NOT allow renting of both main house and ADU. The law was written this way for a reason. Rampant speculation in Palo Alto is already a huge problem. If you allow non residents to put two dwellings on our very small lots and rent both, our housing will be even more unaffordable. You might as well just demolish every house owned by the resident and turn everything into apartment housing.

Posted by Duveneck resident
a resident of Duveneck/St. Francis
on Jan 16, 2018 at 12:16 pm

Palo Alto is beset with poor decisions on all fronts because they do not have lawyers adequately knowledgeable in law and/or with the existing restrictions and laws already on the books. This extends to the ADU problem, the Edgewood Market situation, PAUSD issues of many kinds and other problems too numerous to count. This lack of knowledge, plus rushing into decisions before having ALL the facts is making the city council and related city government agencies look like fools. Unfortunately, residents pay the price and are left shaking their heads.

Posted by Novelera
a resident of Midtown
on Jan 16, 2018 at 12:19 pmNovelera is a registered user.

I found it disturbing to get a mailer inviting me to a "seminar" about how to build an ADU in my back yard. This event was obviously being put on by a builder hoping to cash in on the "boom town" we're currently living through in Palo Alto.

Posted by no rights for next door neighbors
a resident of Duveneck/St. Francis
on Jan 16, 2018 at 2:01 pm

Please consider that the rules allow these ADU's to be build just 6 ft away from the back or side fence of next door neighbors. Our yards are small so that the natural noise and living activities from these new granny units radically threaten the lifestyle of those near neighbors. Our backyards loose their privacy. The peace inside our homes is compromised as we can hear the noise of dogs, music, children from the granny units through windows.All separation of living spaces is reduced with great negative impact.

If people want to build ADU's on their property, the law should be that the unit should have to be close or attached to the original structure so that the home owner in inconvenienced by the noise and activity rather than the neighbor. This city counsel choice fully ignores the rights of and quality of life issues of neighbors. We bought houses in single family neighborhoods. When we bought these houses we expected the privacy of our small back yards to remain.

Posted by Novelera
a resident of Midtown
on Jan 16, 2018 at 3:23 pmNovelera is a registered user.

@No rights for next door neighbors. Amen! Our build-it-and-they-will-come Big Growth City Council majority have absolutely no interest in or concern for people who already live here. They are just towing the politically correct line that we MUST add more housing to keep up with the jobs-housing imbalance. But they never seem to say anything about reducing the number of jobs to fix this

Posted by Gale Johnson
a resident of Adobe-Meadow
on Jan 16, 2018 at 9:34 pmGale Johnson is a registered user.

I spent a lot of time posting on this subject in the past. I was opposed to it from the beginning. I knew it had the possibility of destroying the quality of life in R-1 neighborhoods, especially those with small lot sizes. That was a risk I didn't want to take and see happen. Throw in total relief on parking, the inability to enforce the rules, and it added up to a bad situation, in my mind. It was never clear what the real purpose was, and even the proponents said it wouldn't make a dent in our housing needs. So, who were the proposed beneficiaries. For real 'grannies', family members, kids returning back to the nest? Or, for those owners who were underwater and needed help in making their mortgage payments, and ADU's serving as long term Airbnbs to fill the bill. I guarantee, none of the CC home owners would ever consider putting an ADU on their properties, except if it was family related, which would be the right thing to do, and should have been the intended use by the new ordinance.
I can't imagine the ADU renters really becoming involved in, and contributing to the betterment and welfare of our community (I could be totally wrong) so, in that sense, they would just be a drain on it.

Palo Alto was, and should continue to be, a unique city, and not wanting, or feeling the need to be like our other neighboring cities. Why do we have to feel guilt about not emulating and catching up with our neighboring cities on housing and office growth? Let's turn back the clock, a little bit. for the sake of us old timers.

I'll just watch and wait. With building costs of $300+ per sq ft in PA, it doesn't seem probable that there will be many units built, but again, I could be wrong.

Posted by Resident
a resident of Another Palo Alto neighborhood
on Jan 17, 2018 at 7:43 am

KTVU channel 2 did a segment on this last night about the same thing happening in San Francisco and San Jose. The claim was being made that these were in law units being built for aging parents from Asia and India to move to this country to be near their children and grandchildren as they age.

Even if this is the case, these parents are not going to live in the units forever. At some stage these aged parents will not be living in them. What will then happen to the units? What will happen if the homes are then sold to a younger family who doesn't need them for aged parents?

I am still not happy with cramming more homes into established residential neighborhoods where the quality of life issues mentioned already will come into play for every home in the neighborhood due to the overcrowding issues.

Posted by mauricio
a resident of Embarcadero Oaks/Leland
on Jan 17, 2018 at 10:59 ammauricio is a registered user.

..."Palo Alto was, and should continue to be, a unique city, and not wanting, or feeling the need to be like our other neighboring cities. Why do we have to feel guilt about not emulating and catching up with our neighboring cities on housing and office growth?"...

Voting for Cory Wolbach completely contradicts this view. I'm very confused as to why a person who feels this way would vote for one of the most miltantly mega growth PAF members. It makes no sense whatsoever.

Posted by Annette
a resident of College Terrace
on Jan 17, 2018 at 1:16 pmAnnette is a registered user.

@no rights for next door neighbors is exactly right. Building an ADU is one thing, but being able to build it so close to your neighbor's home that normally private functions (conversations, coughs, flushing toilets, arguments, audio from computers, tv, and radio, etc) are imposed on your neighbor is a lousy rotten thing to do. Approving this was, at best, thoughtless on the part of the CC majority. Six feet is too close. Period.

Posted by New Council
a resident of Old Palo Alto
on Jan 17, 2018 at 3:54 pm

Allowing/encouraging ADUs is an unmitigated disaster. I certainly hope a new council can be brought it to reverse this decision. Palo Alto is already massively overcrowded and the proposed fix is to... ADD MORE PEOPLE?!?

The only scenario where I can envision this working is if the ADU are limited to larger lots (R1, 10,000 zoned lots and larger); ensure that additional garage, driveway parking is included (the current version of the ADU rule removed parking requirements); and to reduce the maximum lot coverage, and Gross Floor Area ratio allowed if a ADU is added.

Posted by mauricio
a resident of Embarcadero Oaks/Leland
on Jan 17, 2018 at 4:09 pmmauricio is a registered user.

That's right. Palo Alto is massively overcrowded and any proposal that adds residents to its population is insane. Any additional commercial project is equally insane-the traffic caused by commercial developments is killing P.A. The ADU is mostly a scheme to enrich developers and circumvent R-1 zoning regulations. How long before this town resembles Hong Kong without ultra modern public transportation?

I also find those who bitterly complain about ADUs destroying their quality of life while voting for Cory Wolbach utterly hypocritical.

Posted by New Council
a resident of Old Palo Alto
on Jan 18, 2018 at 8:45 am

Commenters above have made the point that if their neighbor were to add an ADU it would negatively impact the use of their backyard -- possibly significantly. To me, this shows hints of a Regulatory Taking. While not a physical taking of property (a Taking in the classical sense), Palo Alto is, in effect, purposely changing local code which will knowingly and directly lead to a significant reduction to the fair use and enjoyment of adjacent properties. I am not an attorney, so I would appreciate it if one could chime in here. Are there grounds for an injunction while the courts determine if there is merit to a this new rule constituting a Taking?

Let's not forget the reason that the City added the ADU regulations to the books is because it became state law. While there are some limits on what the City can require the State opened the doors on these. I agree the ADU regulations were rushed through and approved 6 months after state law had already taken effect. The current ADU regulations are riddled with ambiguities and inconsistent with standard found elsewhere in the code. I feel $10K in impact fees is not enough...That is like what? 3-4 months of rent on the thing?

Posted by Annette
a resident of College Terrace
on Jan 18, 2018 at 10:41 amAnnette is a registered user.

Also worth remembering that the original ordinance submitted by Staff would have satisfied State requirements in a timely manner. Council Majority pushed through the various tweaks that make the Palo Alto ADU ordinance special - and more intrusive. Now time has to be dedicated to refining the thing, sorting out the problems and clarifying the ambiguities.

Also, an original driver was to add affordable housing; there's no assurance that that will be achieved.

Posted by Online Name
a resident of Embarcadero Oaks/Leland
on Jan 18, 2018 at 10:43 amOnline Name is a registered user.

Yes, the ADUs are state law but PA -- an already very dense municipality -- rushed through a version that far exceeds the state provisions applied in less dense rural municipalities with larger lot sizes.

Posted by no rights for next door neighbors
a resident of Duveneck/St. Francis
on Jan 18, 2018 at 11:13 am

It is heartening to see how many people are responding to these new ADU rules with equal concerns about their impact on the quality of life of near neighbors. It is disheartening that this community response seems to fall on the deaf ears of our city council. Is there no way to suspend approval of these intrusive structures until the problems are worked out? It would be helpful to receive responses from a lawyer to "New Council's" comment about the possible laws broken by allowing intrusion on a neighbors property. Yes, the state has loosened requirements, but that is no reason for Palo Alto to loosen them even further. Does the city have any rights to adapt the new state requirements to meet the culture of the community? Could the city insist that the set back be further away from the neighbor? Could the city insist that an additional parking space must be available? Could the city keep the rule that the main house must be occupied by the owner? Could the city require and consider input from the near neighbor when reviewing application for a new ADU structure?These kinds of restrictions can make a big difference for our City. How can Palo Alto neighbors reclaim rights and consideration?

Posted by paresident
a resident of Fairmeadow
on Jan 29, 2018 at 1:03 pm

Please, please do not allow these ADU units to be renters and also the main house renters with no owner present. This will definitely impact the neighborhood because the owner can stuff as many tenants as possible into both houses. The owner doesn't have to deal with how this changes R-1 density to a much higher density neighborhood.-- the rapid turnover not to mention the many cars that need parking.

Before any more changes are made the city needs to deal with how many tenants the owner can rent out to per house in the R-1 zone. This is the case for hotels/theaters/inns/ you name it. De facto, the city is eliminating the R-1 zone.